New Chief Executive Officer Lip-Bu Tan told employees this week that Intel no longer leads in market value despite its technological advantage, a wake-up call as the company faces severe technical and financial challenges and begins mass layoffs.

Market value challenge

Lip-Wu Tan's warning

The new CEO, Lip-Wu Tan, announced to employees around the world this week that although Intel has a technological advantage, its market value is no longer leading and it is no longer one of the top ten semiconductor companies. 

He called this a wake-up call because Intel is facing severe technical and financial challenges and has begun large-scale layoffs. Lip-Wu Tan emphasized that Intel was a leader 20 or 30 years ago, but now the world has changed, and some customers have reported that Intel has not met their expectations, especially in the field of AI training, which lags behind Nvidia.

Market value decline

Intel's market value has fallen sharply to about $100 billion, only half of what it was 18 months ago, while Nvidia's market value briefly exceeded $4 trillion on Wednesday, becoming the first company to reach this threshold. Although Lip-Wu Tan did not directly mention the market value in his conversation, a spokesperson clarified that his remarks focused on market value rather than technological leadership, highlighting the serious decline of Intel's dominance in the chip industry.

Global layoffs

Intel launched large-scale global layoffs this week, planning to lay off 529 employees in Oregon by mid-July and hundreds of people in California, Arizona and Israel. In the coming weeks, more employees will lose their jobs as the company closes its automotive business, outsources its marketing department and cuts manufacturing jobs (up to one-fifth). Lip-Wu Tan said the layoffs are aimed at reducing scale to increase speed and deal with slow decision-making.

Transformation Strategy

Transformation Marathon

Tan Lip-wu likened Intel's transformation to a "marathon," emphasizing that layoffs are intended to make the company more flexible and agile, emulating competitors such as Nvidia, Broadcom and AMD. He warned employees to remain humble, listen to customers and respond to needs to solve the problem of slow internal decision-making processes. 

This is the first time Tan Lip-wu has publicly expressed this view since taking office in March, and it is seen as a key guide for Intel's future.

New direction of AI

Intel lags behind in the field of AI, and Tan Lip-wu admitted that Nvidia is "too strong" in the training market and Intel has missed the opportunity. Therefore, the company will focus on "edge AI" (bringing AI capabilities to devices such as personal computers) and emerging "agent AI" (AI runs independently without continuous human guidance). 

The three newly hired vice presidents will promote the progress of the AI business, and Tan Lip-wu said "please stay tuned" and more talents will join in the future.

Process advancement

Intel is launching a new process technology Intel 18A, which aims to enhance chip competitiveness to compete with TSMC, and plans to develop the next-generation 14A process. Tan Lip-wu emphasized that the first task is to ensure that 18A meets internal needs, and then expand cutting-edge research and development. 

Although Reuters reported that Intel might stop promoting 18A, Chen Liwu did not respond directly during the conversation, but pointed out that Intel needs to prove its processor capabilities first to catch up with the technological setbacks in the past decade.

Source: Content compiled from oregonlive

Reference link

https://www.oregonlive.com/silicon-forest/2025/07/intels-ceo-we-are-not-in-the-top-10-of-leading-chip-companies.html

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